Eligible Services Phil Gieseler / Paul Stankus Train-the-Trainer Workshop September 27-29, 2004...

Eligible ServicesPhil Gieseler / Paul Stankus

Train-the-Trainer WorkshopSeptember 27-29, 2004

Schools & Libraries Division

Slide #2Schools and Libraries Division

Eligible Services

Eligible Services List Hazards and Pitfalls Service Substitutions Wide Area Networks Eligible Products Database

Basic maintenance Technical Services Eligible Users and Locations Equipment locations on Item

21 Attachment Duplicative Services Equipment Transfers Cost Allocation


Eligible Services List

What’s New in 2005? Formalized List Changes in Eligibility New Format Web-Based Interface


Eligible Services List

On or Before June 30 – submitted to FCC. FCC publishes list in Federal Register for

comments. FCC issues Final list “at least” 60 days in

advance of opening of window– on or about September 15.

List is safe harbor for upcoming fund year.Source: FCC 03-323 Third Report and Order: Paragraph 40


Eligible Services ListFormat Changes

Standardized Product Types and Functions

Description is now 2 categories: Description Eligibility Description

Pages now have Funding Year Date


Eligible Services ListWeb Interface

Searchable format Category Function Product Type Keyword

Results grouped by Funding Bucket

Search by “All” generates entire list.


Eligible Services ListWeb Interface


Hazards and Pitfalls

Basic maintenance Technical Services Eligible Users and Locations Equipment locations on Item 21 Attachment Duplicative Services Equipment Transfers Cost Allocation


Basic Maintenance

What is “basic” maintenance? Without the maintenance, the

connection would not function and serve its intended purpose with the degree of reliability ordinarily provided in the marketplace.


Basic Maintenance

Generally eligible: Repair and upkeep of eligible hardware Wire and cable maintenance Basic technical support Configuration changes.


Basic Maintenance

NOT eligible:

On-site technical support i.e., contractor duty station is at the applicant site when off-site technical support can provide basic

maintenance on an as-needed basis Help Desks

that provide a comprehensive level of support beyond basic maintenance of only eligible components


Basic Maintenance

NOT eligible:

24-hour network monitoring Network management Technical support contracts that are

more than basic maintenance.


Basic Maintenance

If a technical support contract provides more than basic maintenance, it is fully ineligible.

Basic maintenance funding requests are in a separate Priority 2 category of service beginning in Funding Year 2005.


Basic Maintenance

Must be cost effective. Agreement must specifically identify

the components covered, including product name, model number, and location.


Basic Maintenance

Question #1: Eligible or Ineligible? Hardware maintenance contract

(“break/fix”) for 40 routers, 217 network switches, 51 eligible file servers, and internal network cabling.


Basic Maintenance

Answer– This is eligible as basic maintenance if:

Components are all eligible Services are cost effective Agreement provides make, model, and

location


Basic Maintenance

Question #2: Eligible or Ineligible? Hardware “break/fix” as before, plus

ongoing technical support to configure and maintain the file server and router operating systems.


Basic Maintenance

Answer– This is eligible as basic maintenance under the same conditions as before:

Components are all eligible Services are cost effective Agreement provides make, model, and

location


Basic Maintenance

Question #3: Eligible or Ineligible? Technical support described as “basic

maintenance” that provides break/fix, configuration changes, and network monitoring and management.


Basic Maintenance

Answer– A funding request for these services would be denied in full because the services go beyond basic maintenance as defined by the FCC.

The ineligible components are network monitoring and management.


Technical Services

Conditionally eligible Technical Services include:

Design & Engineering Installation Project Management Training


Technical Services

Conditions for Design & Engineering: Basic Necessary for installation and initial

configuration Coincident with (occurring at the same time) Part of the same contract or bid as the related

products and services


Technical Services

Conditions for Installation: Does not include follow-on support. Outside the scope of eligible installation

services: Planning Design of network architecture


Technical Services

Conditions for Project Management: Basic costs associated with management of

installation and initial operation of eligible products and services

Part of the contract or bid for those eligible products and services


Technical Services

Conditions for Training: Basic instruction on the use of eligible

equipment Coincident and directly associated with

installation of the equipment Part of the contract or agreement for the

equipment


Technical Services

Technical Services that are NOT eligible include:

Consulting Initial Planning Operations Personnel


Technical Services

Question #4: Eligible or Ineligible? With tight deadlines, an applicant submits a

“stopgap” funding request that specifies a possible technical configuration.

After approval, the service provider provides design and engineering to determine what changes should be made in the technical configuration.


Technical Services

Answer– Not eligible because this is planning for network architecture rather than basic services necessary for the installation and initial configuration of the components as proposed and approved.


Technical Services

Question #5: Eligible or Ineligible? To provide support for a new network

design, an applicant seeks funding for internal staff training that will result in their receiving industry technical certifications.


Technical Services

Answer– Not eligible in virtually all situations. To be eligible, training must meet all of these criteria:

Provided by the same service provider as is providing the installation

Coincident and directly associated with that installation

Part of the same contract Limited to basic training


Eligible Users and Locations

Also known as “Educational Purposes” Must understand the different treatment

of Priority 1 and Priority 2



Priority 1: Eligible activities are “integral,

immediate, and proximate” to: Education of students Provision of library services to patrons

Presumption is that activities on school or library property meet this standard.



Some offsite telecommunications activities may also be eligible: School bus driver using a cellular phone Connectivity to a mobile library van Paging service for teachers on field trips



Priority 2: Internal connections in administrative or

non-instructional buildings are only eligible if “essential for the effective transport of information to an instructional building of a school or to a non-administrative building of a library.”



Question #6: Eligible or Ineligible? Cell phone use by a cafeteria worker? Cell phone roaming charges for a

teacher to contact family and friends during summer vacation?



Answer– Cafeteria workers are eligible users beginning in Funding Year 2004.

However, these cell phone charges do not meet the presumption that the cell phone use is for educational purposes, and these charges in this example would not be considered eligible.



Question #7: Eligible or Ineligible? A school district office is located in the

high school building, and wants funding for the cabling and equipment that will support district office staff.



Answer– Since the internal connections are requested for a building that houses instruction, the request to cover administrative offices would be approved. (If the District Office were in a separate building,

the internal connections used for District Office connectivity could not be approved.)


Equipment locations onItem 21 Attachment

Be aware of new and important instructions for Form 471:

“For Internal Connections products, sufficient information must be provided so that the SLD understands the installation location.”


Equipment locations onItem 21 Attachment

Examples: “One per school” “District Office” “Entity number 12345” “One per location, except three will be

installed at entity number 12345”


Duplicative Services

Ineligible duplicative services provide “…same functionality to the same population in the same location during the same period of time.”

SLD may request further information if funding requests appear to be seeking redundant products or services.

Example: Multiple T-1 lines are okay if supported by needs of the applicant, but not okay if the extraT-1 lines are only providing backup capability.



Question #8: Eligible or Ineligible? An applicant wants to use wireless

networking for its portable classrooms, but copper cabling for its traditional classrooms.



Answer– If there is no overlap in the locations served, then the configurations are not duplicative, and both technologies can be funded. Clear information on Item 21 Attachments

will help speed review of funding requests.


Equipment Transfers

E-rate-funded equipment may not be transferred for money or any other thing of value.

A no-cost transfer of E-rate-funded equipment may take place three years or more after the purchase of such equipment.

No equipment transfer may take place prior to three years from purchase.


Equipment Transfers

Exception to the 3-year transfer prohibition: permanent or temporary closing of the eligible entity.

In this case, the applicant must notify USAC and maintain records of the transfer.

Note that all entities must maintain asset and inventory records for five years.


Equipment Transfers

The transfer limitations do not prevent an applicant from trading-in E-rate-funded equipment for other equipment with similar functionalities.

The trade-in amount reduces the pre-discount amount of a new funding request.


Equipment Transfers

Question #9: Eligible or Ineligible? A school with an 80% discount rate has

closed. E-rate-funded equipment from that school is transferred to another school with a 50% discount rate.


Equipment Transfers

Answer– This is eligible. Since the school has permanently closed, a transfer that is without monetary consideration or any other thing of value can take place. The discount rates of the entities need not be comparable, but both must be E-rate eligible entities.


Equipment Transfers

Question #10: Eligible or Ineligible? A school has equipment that was not

purchased with E-rate funds, and is trading-in this equipment to a service provider for new E-rate eligible equipment. The applicant uses the trade-in value to reduce the applicant portion owed to the service provider.


Equipment Transfers

Answer– This is eligible because the equipment traded-in was not obtained using E-rate funds. However, the trade-in must be based on fair market value, and SLD makes a rebuttable presumption of a three-year life with straight-line amortization.


Cost Allocation

Cost allocation: if a product or service has both eligible and ineligible components, funding must be requested only for the eligible portion.

An acceptable cost allocation is based on tangible (not subjective) information and provides a realistic result.


Service Substitutions

Service substitution: a request to change the details of the Item 21 Attachment.

The SLD is considering a new approach to service substitutions that will improve processing efficiency.

New approach is based on the “Functions” and “Product Types” that will be integral to the 2005 Eligible Services List.



The concept: If a proposed service sub makes no change in

“Product Type,” then it can receive expedited processing.

Examples: A router for a router A UPS for a UPS A PBX for a PBX.



Additional concept: No change in “Function” meets FCC

requirements for “same functionality.” Examples:

A router for a switch (data distribution) A UPS for a tape backup (data protection) A PBX for a key system (telephony).



Function categories:

Software

Storage devices

Technical services

Telephony

Video

Cabling/connectors

Circuit Cards/components

Data distribution

Data protection

File servers

Interfaces/gateways

/antennas


Wide Area Networks

Two important limitations: The SLD will not pay for WAN infrastructure

costs when doing so “reaches essentially the same result” as a prohibited WAN purchase.

We presume that components at the applicant site are Internal Connections rather than part of a WAN.


Wide Area Networks

WAN infrastructure costs: Up-front service provider capital costs

greater than $500,000 must be amortized over at least three years.

Applicants must re-apply each year for the amortized amount.


Wide Area Networks

WAN infrastructure costs: The SLD will scrutinize funding

requests that have characteristics of: Exclusive access A lease-purchase agreement High up-front costs


Wide Area Networks

Components at the applicant site: Presumption that components at the applicant

site are internal connections can be overcome in some cases.

“Basic terminating equipment” may be a part of a WAN service.

Examples of basic terminating equipment: CSU/DSU Network interface device Fiber-to-copper converter


Wide Area Networks

Components at the applicant site: Components beyond “basic terminating

equipment” must meet a rigorous test. “Tennessee Test” aka “on-premise Priority 1”

Examples beyond basic terminating equipment: Router Network switch


Wide Area Networks

Components at the applicant site: Among the conditions that must be satisfied:

WAN components only A single, specific demarcation between WAN and

LAN No contractual or technical limitation against the

service provider making WAN facilities available to other customers (for configurations that would normally be shared in other similar arrangements).


Eligible Products DatabasePilot Program

This is a database of Internal Connections Products that are eligible for funding.

List is searchable by keyword, manufacturer name, product type, etc.

Interface for creating Item 21 Attachments is due out this Fall.


Eligible Products Database--Stats

As of 9/15/04 over 25 manufacturers have enrolled. 3000+ entries have been reviewed.

After public launch of Eligible Products Database, the database will be updated regularly to include new entries.

Pilot Program only includes internal connections products –not services.

Pilot Program participation limited to manufacturers, not third-party vendors or service providers.


Eligible Products Database

SLD review generally relies on the information provided by manufacturers.

Misrepresentations or incomplete information by manufacturers could lead to removal of entries from the list and possible funding denials and fund recoveries.


Participating Manufacturers

Here is a sample of participating manufacturers

Manufacturer enrollment is currently closed, but may reopen in future.

List is not exhaustive.

3-Com Alcatel

Cisco Dell

HP IBM

Marconi Nortel

Siemens Sprint

Waters Network

Allied Telesyn

Safari Polycom


References

Basic Maintenance See FCC 3rd Order, paragraphs 20-24

Technical Services See SLD Eligible Services List

Eligible Users and Locations See SLD document “Educational Purposes”


References

Equipment Locations for Item 21 See Form 471 instructions for 2005

Duplicative Services See FCC 2nd Order, paragraphs 22-24

Equipment Transfers See SLD FAQ’s about eligibility


References

Cost Allocations See relevant documents in SLD Reference

Area

Service Substitutions See SLD’s service substitution document


References

Wide Area Networks See “Wide Area Network Fact Sheet” See also “On-premise Priority 1 Equipment”

Eligible Products Database: See Relevant documents in the SLD reference Area


QUESTIONS

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Eligible Services Phil Gieseler / Paul Stankus Train-the-Trainer Workshop September 27-29, 2004...

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